The strategy behind resurgent diplomatic activity to tackle the Israeli-Palestinian conflict is beginning to emerge, pointing to the goal of interim statehood for the Palestinians before President George W. Bush’s term in office runs out.

Within a year, according to some analysts, a new political entity could come into being called the State of Palestine. However, they warned of many potential pitfalls and doubted it would fulfil the aspirations of the Palestinian people.

“They want to change the name of the Palestinian Authority to the Palestinian state,” said Hani al-Masri, a West Bank political analyst. “But it wouldn’t change anything on the ground. It would be a state under occupation.”

Many Palestinians are wary of a short-term solution they perceive as having more to do with Mr Bush’s legacy and the US’s problems elsewhere in the Middle East than with a lasting settlement of the conflict.

The pace of diplomacy has accelerated since Hamas’s takeover of Gaza last month and Mahmoud Abbas’s consolidation of Fatah’s authority in the West Bank. The PA president’s dismissal of Hamas from government has converted him into a “partner for peace” in the eyes of Israel.

Mr Bush was similarly supportive when he said this month: “By supporting the reforms of President Abbas and Prime Minister [Salam] Fayyad, we can help them show the world what a Palestinian state would look like – and act like.”

Since then Tony Blair has been appointed envoy of the international Quartet to oversee reforms and the foreign ministers of Egypt and Jordan made a joint visit to Jerusalem. Condoleezza Rice, US secretary of state, this week embarks on her latest shuttle to the region.

An international conference, announced by Mr Bush in a speech on July 16, will take place in the autumn, probably in New York. If all goes well, a more substantive session will be held in December.

In the meantime the leaders on both sides have been preparing their national constituencies for the consequences of the new strategy. Both Mr Abbas and Ehud Olmert, the Israeli prime minister, spoke of the need to define the final outcome of renewed negotiations. Mr Abbas calls it an “end game”, Mr Olmert “an agreement of principles”.

For Mr Abbas these principles would include a Palestinian state in pre-1967 borders, the solution of such core issues as the status of Jerusalem and the fate of Palestinian refugees, “and afterwards, only afterwards, the implementation”.

Mr Olmert’s vision is of a state including some 90 per cent of West Bank land, with Israel retaining its big settlement blocks. He would prefer to sidestep the issues of Jerusalem and refugees for now.

To sweeten the pill for the Palestinians, Ms Rice said last week that Israel must end its occupation of the West Bank and secure its future in regions such as Galilee and the Negev. The latter is a policy already embraced by the Olmert government and long sponsored by Shimon Peres, the new Israeli president.

Haim Ramon, a close political ally of Mr Olmert, has said Israel should leave most of the West Bank because “the occupation of the territories threatens our very existence, our legitimacy and our international standing”. Mr Ramon was seen as flying a kite for the prime minister, a function Mr Olmert performed for Ariel Sharon, his predecessor, when the latter was planning the controversial 2005 Israeli exit from Gaza.

The Olmert government might be tempted to secure a deal with Mr Abbas while he is relatively weak.

The Palestinian president previously rejected any interim statehood that would leave borders undefined. A putative interim state would remain hemmed in by Israeli military controls and the army might even insist on retaining a right of hot pursuit.

The concept of interim statehood – analysts have taken to calling it Oslo-2 in reference to the autonomy agreements that created the PA but failed to lead to Palestinian independence – faces considerable barriers.

Success assumes that Hamas, isolated in the Gaza Strip, will continue with its policy of non-aggression towards Fatah in the West Bank. It also assumes that the Israeli public will buy the idea so soon after a Gaza withdrawal whose aftermath they blame on Palestinian intransigence.

Israel and the PA leadership may be tempted to seize the moment because the focus of attention in the Middle East has shifted to Iraq and Iran.

As James Wolfensohn, Mr Blair’s frustrated predecessor, said in a recent interview: “Israelis and Palestinians really should get over thinking that they're a show on Broadway. They are a show in the Village, off-off-off-off Broadway.”